FOURTH QUARTER REPORT 2018Global in-market unit sales increased 11% in the fourth quarter and 5% for the year reflecting a in- n market value of NOK 284 million (NOK 256 million) for

FOURTH QUARTER REPORT

2018

Q4

Photocure – Results for fourth quarter and full year 2018

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Highlights for fourth quarter and full year 2018 (Numbers in brackets and comparisons are for the corresponding period in 2017.)

• Fourth quarter Hexvix/Cysview revenue increased 18% to NOK 46.3 million, increase of 28% based on proforma 2017. Full year growth of 16%, proforma 19%

• Strong U.S. Cysview revenue growth, fourth quarter up 76% in USD. Full year growth of 53% in USD. Installed base of blue light cystoscopes at 157 at the end of the year, including 8 flexible cystoscopes

• Continued improvement of recurring EBITDA; fourth quarter at NOK -4.1 million (NOK -10.8 million), full year at NOK -10.5 million (NOK -29.1 million)

• Daniel Schneider appointed as President and Chief Executive Officer. Mr. Schneider brings extensive commercial experience in the U.S. healthcare industry. He started 29 October

• In November the United Stated Centers of Medicare and Medicaid Services (CMS) released its final rule securing reimbursement for Cysview for certain Blue Light Cystoscopy procedures when used in hospital outpatient departments as well as a permanent A code for Cysview when used in physician office and other sites of care, effective 1 January 2019

Key figures: Figures in NOK million Q4 2018 Q4 2017 Change FY 2018 FY 2017 Change

Hexvix/Cysview revenues 46.3 39.4 18 % 172.9 149.0 16 %

Total revenues 49.9 39.4 27 % 181.5 150.9 20 %

Operating expenses -49.0 -46.8 5 % -174.9 -168.0 4 %

EBITDA recurring -4.1 -10.8 -10.5 -29.1

EBITDA commercial franchise 1.3 0.9 8.4 10.4

EBITDA development portfolio -5.4 -11.8 -18.9 -39.5

EBIT recurring -7.5 -14.1 -23.7 -41.2

Restructuring expenses -1.1 -14.2

One-off items -4.0

Net Profit/loss (-) -12.0 -13.0 -36.7 -34.7

Cash & cash equivalents 106.8 129.4

President & CEO Daniel Schneider comments: “We closed 2018 with an acceleration in forward momentum posting another record quarter with a YoY increase of 76% in the U.S. our largest and largely untapped market. The combined momentum of Q3 and Q4 drove an overall YoY increase of 53% in the U.S. Notably, and key to increased Cysview future sales, one third of the cystoscopes in the market were installed during 2018 alone. In mid-2018, we launched the newly approved indication for Cysview in the surveillance market. Since January 2019, we have now achieved permanent and favorable reimbursement in all settings of care which will further support adoption of BLC in treating bladder cancer patients. Since assuming the role of CEO in November 2018, I have taken the time to assess the business carefully and have begun implementing changes that will continue to improve execution and performance. Some early key decisions include, increased customer facing roles by nearly 50% starting in Q1 2019, focus on increased accountability and performance from our commercial partners, and developing greater insights into the KPIs that will help us drive performance now and into the future. We will continue to invest in the growing largely untapped U.S. market where we expect to see our greatest returns in the form of significant and sustainable revenue and profitability growth.”


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Operational review Photocure delivers transformative solutions to improve the lives of bladder cancer patients. Photocure is leveraging its flagship brand Hexvix/Cysview for improved detection of non-muscle invasive bladder cancer, reduced disease recurrence and progression rates to improve cost-effective health outcomes for bladder cancer patients. With its established specialist commercial and medical teams in the U.S. and Nordics Photocure has a solid foundation for future growth of its breakthrough bladder cancer product, as well as exploring expansion of its product portfolio.

Update commercial segment The commercial segment continued to show improved sales in the fourth quarter and the full year. Fourth quarter total Hexvix/Cysview revenue increased 18% to NOK 46.3 million (NOK 39.4 million) compared to the same quarter in 2017. Full year Hexvix/Cysview revenue increased 16% to NOK 172.9 million (NOK 149.0 million). Compared to IFRS proforma 2017 the increase in the fourth quarter and full year 28% and 19% respectively. The strong growth is driven by improvements in sales performance in U.S. Fourth quarter revenue increase, measured in USD, was 76%, and full year increase was 53%. Other revenues include IFRS 15 adjustments of NOK 0.8 million fourth quarter and NOK 3.4 million full year. In addition, the company has received milestone payments and royalty from Bellus Medical for Allumera totaling NOK 2.5 million in the quarter and NOK 5.0 million for the full year. Operating expenses, excluding depreciation and amortization, increased 24% to NOK 43.6 million (NOK 35.1 million) in the fourth quarter. Full year operating expenses, excluding depreciation and amortization, increased 21% to NOK 156.0 million (NOK 128.5 million). Increases were driven by the planned increase in U.S. commercial efforts. Fourth quarter recurring EBITDA was NOK 1.3 million (NOK 0.9 million). Full year recurring EBITDA was NOK 8.4 million (NOK 10.4 million). The decline in full year recurring EBITDA was expected and driven by the increased investment in commercial activities in

the U.S. The full year recurring EBITDA margin was 5%.

Hexvix®/Cysview® Global in-market unit sales increased 11% in the fourth quarter and 5% for the year reflecting an in-market value of NOK 284 million (NOK 256 million) for the year. U.S. Cysview sales The company had a strong fourth quarter in U.S. with a revenue growth of 81% to NOK 18.4 million (NOK 10.2 million). The growth is driven both by volume growth and price increases. In USD, the revenue growth was 76%. In-market unit growth in the fourth quarter was 69%. Full year U.S. revenues increased 50% to NOK 63.7 million (NOK 42.4 million), with unit growth of 45%. In USD the revenue growth was 53%. U.S. is now the largest and fastest growing region for Photocure. As in previous quarters, the improvement reflects improved productivity as well as added sales resources. Photocure has from 2017 gradually expanded its commercial and medical organization in the U.S. to increase penetration of Cysview in hospitals and urology practices in both current and new accounts. The company will continue this process in 2019. The growth has been fueled by approval of new indications, launch of the product in the surveillance setting and by improved reimbursement. In February 2018, the U.S. Food and Drug Administration (FDA) approved additional indications for BLC with Cysview to include carcinoma in situ (CIS) lesions, repeated use of Cysview, and use with flexible cystoscopy in the on-going surveillance of patients with non-muscle invasive bladder cancer.

MNOK Q4 '18 Q4 '17 FY '18 FY '17

Nordic - Hexvix 13.5 12.9 47.0 43.3US - Cysview 18.4 10.2 63.7 42.4Partners 14.4 16.3 62.2 63.3Hexvix/Cysview total 46.3 39.4 172.9 149.0

YoY growth 18 % 16 %

Other revenues 3.5 0.0 8.6 1.9Total revenues 49.9 39.4 181.5 150.9

YoY growth 27 % 20 %Gross profit 44.9 36.0 164.4 138.9Operating expenses -43.6 -35.1 -156.0 -128.5

EBITDA 1.3 0.9 8.4 10.4 EBITDA margin 3 % 2 % 5 % 7 %


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In May 2018, Photocure launched Cysview in combination with blue light enabled flexible video cystoscopes from KARL STORZ, and the first bladder cancer patients underwent surveillance examination performed with flexible BLC with Cysview. In addition, sales were impacted by improved reimbursement. In November 2017 the United States Centers for Medicare & Medicaid Services (CMS), established complexity adjustments for certain blue light cystoscopy procedures performed in hospital outpatient departments from 1 January 2018. In November 2018, the reimbursement was extended and strengthened as CMS established an A9598 Code for Cysview when used in the physician office and other sites of care effective 1 January 2019. In addition, CMS also issued a complexity adjustment for certain blue light cystoscopy procedures performed in hospital outpatient departments continuing its complexity adjustment payment which has been in place since 1 January 2018. The Blue Light Cystoscopy with Cysview complexity adjustment results in an incremental payment of $1,187 over white light cystoscopy payment effective 1 January 2019. The improved reimbursement has resulted in a significant growth in the installed base of permanent blue light cystoscopes. At the end of the year the total installed base of rigid cystoscopes was 149, an increase of 45 (43%) for the year. Blue Light Cystoscopy in the surveillance setting is in the midst of a launch in the U.S. market. By the end of the year 8 flexible cystoscopes for the surveillance setting had been installed. The company has developed a robust pipeline for flexible Blue Light Cystoscopy and some accounts have already started offering Blue Light Cystoscopy for surveillance in the U.S. Nordic Hexvix sales Nordic revenues increased 5% to NOK 13.5 million (NOK 12.9 million) in the fourth quarter. Full year Nordic revenues increased 9% to NOK 47.0 million (NOK 43.3 million). The increase was mainly driven by price increases. Photocure’s in-market unit sales in the Nordic region in fourth quarter declined 6% and declined full year 4%. The decline in unit sales was driven by lower sales in Denmark mainly due to large deliveries to hospitals at the end of the fourth quarter 2017 as well as reorganization of clinics. In August, Photocure signed an exclusive distribution agreement for the Nordic area with Combat Medical

(www.combat-medical.com). The device is designed for the delivery of Hyperthermic Intra-Vesical Chemotherapy (HIVEC®) for non-muscle invasive bladder cancer and has a strong strategic and synergistic fit with our current business and customer call points. Photocure will leverage on the extensive Hexvix infrastructure in the Nordics for implementation of the Combat Medical distribution agreement and expects commercial sales to commence from the first quarter of 2019. Hexvix/Cysview partner sales Partner revenue declined 12% to NOK 14.4 million (NOK 16.3 million) in the fourth quarter. Full year partner revenue declined 2% to NOK 62.2 million (NOK 63.3 million). However, compared to IFRS proforma 2017 the fourth quarter partner revenue increased 9% from 2017 revenue of NOK 13.2 million, and full year revenue increased 4% from 2017 revenue of NOK 59.9 million. In-market unit sales were at level with 2017 for the full year including a small growth in Germany and a decline in France. Volume decline in France is due to loss of reimbursement from second quarter 2017. Hexvix/Cysview publications and presentations The company has had several publications and presentations throughout the year. Main publications are: In March and May, new clinical data on Hexvix/Cysview was presented at the 2018 Annual European Association of Urology (EAU) Congress and American Urological Association (AUA) Congress respectively. In April, a new study on Blue Light Cystoscopy (BLCTM) with Hexvix using the KARL STORZ flexible video cystoscope system in the outpatient setting for the laser treatment of low-grade bladder tumors was published in the Scandinavian Journal of Urology. In May, positive results from the U.S. BLC with Cysview registry were published in the Urologic Oncology Journal. Data from the publication showed that BLC significantly increases detection rates of flat, aggressive Carcinoma in Situ lesions (CIS) and papillary lesions compared to WLC alone, and can result in upstaging or upgrading in about 14% of patients and that repeat use is safe. In July, the Patient Reported Outcomes (PRO) with BLC with Cysview Study was published online in the British Journal of Urology International.


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Update development portfolio Visonac® and Cevira®– late stage clinical non-urology development products In second quarter 2017, the Company announced that it will assess further strategic alternatives for its non-urology assets, Cevira and Visonac. The decision to initiate a broad review of possible strategic alternatives for Cevira and Visonac follows a non-conclusive comprehensive partnering process. Photocure will continue assessing further strategic alternatives for Cevira and Visonac.

Financial review (Numbers in brackets are for the corresponding period in 2017; references to the prior year refer to a comparison to the same period 2017, unless otherwise stated).

Photocure has transformed itself from a technology-based company to a therapeutic area-focused commercial stage pharmaceutical company with focus on bladder cancer. The allocation of resources, and hence expenses, have shifted from R&D to sales and marketing in U.S. Overall, the company has in 2018 seen operational improvements from 2017 driving significant improvements in earnings. The company has continued to add resources to its U.S commercial organization, in line with its commercial market opportunities and strategic objectives. The added resources have driven revenue growth, as well as increased sales and marketing costs. Revenues 2018 revenues were impacted by inclusion of IFRS 15 adjustments. The group has adopted IFRS 15 'Revenue from Contracts with Customers' from 1 January 2018. See note 3 to the accounts for explanation and specification of impact on revenues.

The following table is prepared on the proforma basis, as if the newly adopted accounting principles IFRS 15 had been adopted 1 January 2017 and used in quarterly accounts for 2017. Page 23 of this report provides 2017 proforma statements by quarter.

Total revenues in the fourth quarter were NOK 49.9 million, an increase of 27% from the fourth quarter last year (NOK 39.4 million). Full year revenues were NOK 181.5 million (NOK 150.9 million), an increase of 20%. On a proforma basis the fourth quarter and full year increase in total revenue was 34% and 20% respectively. Hexvix/Cysview revenues for the fourth quarter were NOK 46.3 million, an increase of 18% from the fourth quarter of 2017 (NOK 39.4 million). The increase was driven by strong sales in U.S. On a proforma basis, the fourth quarter increase in Hexvix/Cysview revenues were 28%. Full year Hexvix/Cysview revenues were NOK 172.9 million (NOK 149.0 million), an increase of 16%. In constant currencies, Hexvix/Cysview revenues grew 15% for the year. On a proforma basis, the full year increase in Hexvix/Cysview revenues were 19%. Other revenues in the fourth quarter include IFRS 15 adjustments of NOK 0.8 million. Full year other revenues include IFRS 15 adjustments of NOK 3.4 million. In addition, the company has received milestone payments and royalty from Bellus Medical for Allumera totaling NOK 2.5 million in the quarter and NOK 5.0 million for the full year. Operating expenses Total operating expenses, excluding one-off items, depreciation and amortization, were NOK 49.0 million (NOK 46.8 million) in the fourth quarter, an increase

MNOK Q4 '18 Q4 '17 FY '18 FY '17

Hexvix / Cysview revenues 46.3 39.4 172.9 149.0 Other revenues 3.5 0.0 8.6 1.9 Total revenues 49.9 39.4 181.5 150.9 Gross profit 44.9 36.0 164.4 138.9 Operating expenses -49.0 -46.8 -174.9 -168.0 EBITDA recurring -4.1 -10.8 -10.5 -29.1 Depreciation & amortization -3.4 -3.3 -13.2 -12.1 Restructuring expenses -1.1 - -14.2 - One-Off items - - - -4.0 EBIT -8.6 -14.1 -37.9 -45.2 Net financial items 1.2 1.0 1.2 3.6 Earnings before tax -7.3 -13.2 -36.7 -41.6 Tax expenses -4.6 0.2 0.0 6.9 Net earnings -12.0 -13.0 -36.7 -34.7

REPORTED (MNOK) Q4 '18 Q4 '17 FY '18 FY '17

Hexvix / Cysview revenues 46.3 39.4 172.9 149.0 % Change 18 % 16 %Other revenues 3.5 0.0 8.6 1.9 Total revenues 49.9 39.4 181.5 150.9 % Change 27 % 20 %

PROFORMA ADJUSTM (MNOK) Q4 '18 Q4 '17 FY '18 FY '17

Hexvix / Cysview revenues - -3.1 - -3.4 Other revenues - 0.8 - 3.4 Total revenues - -2.3 - -0.0

PROFORMA (MNOK) Q4 '18ProF

Q4 '17 FY '18ProF

FY '17

Hexvix / Cysview revenues 46.3 36.3 172.9 145.6 % Change 28 % 19 %Other revenues 3.5 0.8 8.6 5.3 Total revenues 49.9 37.1 181.5 150.9 % Change 34 % 20 %


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of 5%. Full year, the operating expenses increased 4% to NOK 174.9 million (NOK 168.0 million). The increase in operating expenses for the quarter as well as for the year was driven mainly by planned investments in U.S. commercial operations.

Fourth quarter research and development (R&D) costs were NOK 2.0 million (NOK 5.6 million). R&D costs for the year were NOK 9.3 million (NOK 18.9 million), a reduction of 51%. The remaining R&D costs relate mainly to regulatory work and maintenance and expansion of Photocure’s intellectual property. Sales and marketing costs increased 45% to NOK 33.9 million (NOK 23.4 million) in the fourth quarter. Sales & marketing costs for the full year were NOK 121.2 million (NOK 96.4 million). The increase of 26% was in line with Photocure’s strategic plans and was driven by activities in U.S. Fourth quarter other operating expenses, which include supply chain, business development, and general/administration, were NOK 13.1 million compared to NOK 17.9 million in the same quarter in 2017. Full year other operating expenses decreased 16% to NOK 44.3 million (NOK 52.8 million). Financial results Recurring EBITDA was negative NOK 4.1 million (NOK -10.8 million) for the fourth quarter. Full year recurring EBITDA was negative NOK 10.5 million (NOK -29.1 million). Currency translation had a limited impact on fourth quarter results and a positive impact on full year EBITDA of approximately NOK 2 million compared to prior year. Recurring EBITDA in the commercial segment was NOK 1.3 million for the fourth quarter (NOK 0.9 million) and full year NOK 8.4 million (NOK 10.4 million). The development portfolio recurring EBITDA for the fourth quarter was negative NOK 5.4 million (NOK -11.8 million) and full year negative NOK 18.9 million (NOK -39.5 million). Full year depreciation and amortization was NOK 13.2 million (NOK 12.1 million). The main cost item is the amortization on the investments in intangible assets related to the Phase 3 market expansion trial for Cysview. The increase from prior year was mainly

driven by an IFRS adjustment (note 3 to the accounts) of NOK 1.0 million net costs. Restructuring costs totaling NOK 14.2 million relate to implemented organizational changes and a staff reduction of 5. The cost reductions do not relate to the commercial organization. Included in the restructuring costs are costs related to the exit of the CEO totaling NOK 7.0 million, in accordance with the employment agreement. One-off items in 2017 relate to write-off of parts and finished goods inventory for Nedax, the light source used with Visonac. Net financial items were NOK 1.2 million (NOK 3.6 million) for the year. The decline was driven by reduced interest income and impact from currency. Photocure had a net loss before tax of NOK 7.3 million in the fourth quarter (net loss of NOK 13.2 million) and a net loss before tax of NOK 36.7 million for the year (net loss of NOK 41.6 million). Tax expenses in the fourth quarter were NOK 4.6 million (net income NOK 0.2 million) and full year NOK 0.0 million (net income of NOK 6.9 million). The net cost in fourth quarter is due to reduced tax rate driving lower tax asset. Net loss was NOK 12.0 million in the fourth quarter (loss of NOK 13.0 million) and full year NOK 36.7 million (loss of NOK 34.7 million). Cash flow and statement of financial position Net cash flow from operations was positive NOK 11.2 million in the fourth quarter (positive NOK 7.5 million) and negative NOK 24.1 million for the year (negative NOK 23.6 million). The impact from changes to working capital full year was positive NOK 1.4 million (positive NOK 6.4 million). Net cash flow from investments was negative NOK 0.4 million in the fourth quarter (negative NOK 1.2 million) and negative NOK 1.1 million for the year (negative NOK 16.3 million). The improvement was driven by the finalization of the Phase 3 market expansion trial for Cysview. Fourth quarter cash flow from financing was positive NOK 3.1 million, driven by issuance of new shares for stock option program. Fourth quarter net change in cash was positive NOK 14.0 million (positive NOK 6.3 million). Full year net change in cash was negative NOK 22.5 million (negative NOK 39.9 million). Cash and cash

MNOK Q4 '18 Q4 '17 FY '18 FY '17Research & Developm. 2.0 5.6 9.3 18.9 Sales & Marketing 33.9 23.4 121.2 96.4 Other Opex 13.1 17.9 44.3 52.7 Operating expenses 49.0 46.8 174.9 168.0 excl one-off YoY growth 5 % 4 %


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equivalents were NOK 106.8 million at the end of the year. Shareholders’ equity was NOK 176.3 million at the end of the year, an equity ratio of 76%. As of 31 December 2018, Photocure held 14,930 own shares.

Risks and uncertainty factors Photocure is exposed to risk and uncertainty factors, which may affect some or all of the Company’s activities. Photocure has commercial risk, financial risk, market risk, as well as operational risk and risk related to development of new products. The most important risks the Company is exposed to are associated with market development for Hexvix/Cysview, progress of partnering activities, as well as financial risks related to interest rates, liquidity and currency fluctuations. There are no significant changes in the risks and uncertainty factors compared to the descriptions in the Annual Report for 2017.

Outlook Photocure has built considerable experience in the bladder cancer market through its Hexvix/Cysview franchise and sees significant long-term value creation potential in this market segment. The company aims to capitalize on a number of factors including inclusion in the AUA-SUO guidelines, increased patient awareness and the improved reimbursement of Cysview. These drivers will significantly increase penetration in the U.S. market. Furthermore, with the approval of Cysview to be used with flexible cystoscopes, a significant market opportunity has opened in the surveillance segment.

Given the large untapped market opportunities, the company will continue to invest in the U.S. commercial and medical infrastructure in 2019. Photocure is fully funded for this market strategy. The company maintains its 2020 forecasted revenue range of USD 20-25 million in the U.S., up from USD 7.8 million in 2018, and sees significant continued revenue growth and profit opportunities in the U.S. market beyond 2020. Along with our partner Karl Storz, we have doubled the number of installed blue light cystoscopes in the U.S. since 2016. We believe the continued strong installation growth rates will drive future revenue growth for Cysview. Key to our continued success is the acceleration and adoption of the newly approved Flexible Blue Light Surveillance Cystoscopy with Cysview performed in the larger surveillance market. We will expand the commercial footprint by 50% early 2019. The expansion of customer facing roles will help drive cystoscope installations in coordination with our partner Karl Storz and increase the number of patients treated with Cysview per installed scope in all settings of care. The improved permanent reimbursement rates went into effect 1 January 2019 and will provide physicians the ability to use Cysview in Blue Light Cystoscopy procedures on the majority of their patients without negatively affecting their practice economics. Recent bladder cancer patient survey data confirms that there is growing awareness and patient demand for Blue Light Cystoscopy with Cysview. Patients are now actively seeking treatment centers who offer Cysview and Blue Light Cystoscopy. Our future growth rates will also be significant and sustainable through continued investment and focused execution.

The Board of Directors and CEO Photocure ASA

Oslo, 26 February 2019

Jan Hendrik Egberts

Chairperson

Johanna Holldack

Director

Gwen Melincoff

Director

Tom Pike Director

Synne H. Røine

Director

Grannum R. Sant

Director

Daniel Schneider President and CEO


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Photocure Group Accounts for fourth quarter and full year 2018

Photocure Group – Statement of comprehensive income

2018 2017 2018 2017(all amounts in NOK 1,000 except per share data) Note Q4 Q4 1.1-31.12 1.1-31.12Sales revenues 3 46,526 39,409 173,237 149,181 Signing fees and milestone revenues 3 3,340 -0 8,273 1,730 Total revenues 49,866 39,409 181,510 150,911 Cost of goods sold -4,965 -3,404 -17,147 -12,011 Gross profit 44,901 36,005 164,363 138,900

Indirect manufacturing expenses 4 -1,626 -3,678 -10,252 -11,293 Research and development expenses 4 -4,467 -8,164 -19,145 -32,591 Marketing and sales expenses 4 -33,928 -23,382 -121,301 -96,430 Other operating expenses 4 -12,389 -14,924 -37,370 -43,789 Total operating expenses recurring -52,409 -50,148 -188,066 -184,103 EBIT -7,508 -14,143 -23,703 -45,203 Restructuring 7 -1,066 - -14,199 - EBIT including restructuring -8,574 -14,143 -37,902 -45,203 Financial income 1,590 1,454 3,652 5,949 Financial expenses -356 -485 -2,464 -2,326 Net financial profit/loss(-) 1,234 969 1,188 3,622 Profit/loss(-) before tax -7,340 -13,174 -36,715 -41,580 Tax expenses 5 -4,630 171 6 6,883 Net profit/loss(-) -11,970 -13,003 -36,709 -34,697 Other comprehensive income 106 66 -308 -507 Total comprehensive income -11,864 -12,937 -37,017 -35,204 Net profit/loss(-) per share, undiluted 6 -0.55 -0.60 -1.70 -1.61 Net profit/loss(-) per share, diluted 6 -0.55 -0.60 -1.70 -1.61


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Photocure Group – Statement of financial position

Photocure Group – Changes in equity

(Amounts in NOK 1,000) Note 31.12.2018 31.12.2017Non-currrent assetsIntangible assets 8 22,502 33,315Machinery & equipment 2,141 1,268Deferred tax asset 5 52,377 52,903Contract costs 747Total non-current assets 77,767 87,486

Current assetsInventories 18,582 19,552Accounts receivable 20,371 14,573Other receivables 7,643 12,119Cash and short term deposits 9 106,833 129,368Total current assets 153,429 175,613

Total assets 231,196 263,099Equity and liabilitiesEquityShare capital 10 10,890 10,779Other paid-in capital 63,656 57,740Retained earnings 101,797 149,561Shareholders' equity 176,342 218,080Long-term liabilitiesOther non-current liabilities 7 2,401 4,752Total long-term liabilities 2,401 4,752Current liabilities 45,389 40,267Contract liabilities 7,064Total liabilities 54,854 45,019Total equity and liabilities 231,196 263,099

2018 2017 2018 2017(Amounts in NOK 1,000) Note Q4 Q4 1.1-31.12 1.1-31.12Equity at end of prior period 218,080 251,943Adjustments initial applications of IFRS 15 & IFRS 3 -10,746 Adjusted equity beginning of period 182,621 230,724 207,334 251,943Capital increase 5,597 6,339Share-based compensation (share options employees) -12 292 63 1,341Own shares -377 Comprehensive income -11,864 -12,937 -37,017 -35,204 Equity at end of period 176,342 218,080 176,342 218,080


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Photocure Group – Cash flow statement

2018 2017 2018 2017(Amounts in NOK 1,000) Q4 Q4 1.1-31.12 1.1-31.12Profit/loss(-) before tax -7,340 -13,174 -36,715 -41,580 Depreciation and amortisation 3,431 3,309 13,211 12,108 Share-based compensation -12 292 63 1,341 Net interest income -149 -268 -1,125 -2,310 Changes in working capital 12,738 17,121 1,416 6,396 Other operational items 2,512 213 -976 452 Net cash flow from operations 11,180 7,493 -24,124 -23,593 Net investments in fixed assets -528 -683 -1,630 -1,050 Development expenditures - -803 -559 -17,538 Received interest payments 149 268 1,125 2,310 Cash flow from investments -379 -1,218 -1,063 -16,278 Share capital increase employees 6,339 - 6,339 - Reclassification and paid long-term liability -3,136 -3,310 Buy back own shares - - -377 - Cash flow from financing activities 3,203 - 2,652 - Net change in cash during the period 14,005 6,276 -22,535 -39,871 Cash & cash equivalents at beginning of period 92,828 123,092 129,368 169,239 Cash & cash equivalents at end of period 106,833 129,368 106,833 129,368


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Notes to the accounts for fourth quarter and full year 2018

Note 1 – General accounting principles General information Photocure ASA is a public limited company domiciled in Norway. The business of the Company is associated with research, development, production, distribution, marketing and sales of pharmaceutical products and related technical medical equipment. The Company’s shares are listed on the Oslo Stock Exchange (OSE: PHO). The Company’s registered office is Hoffsveien 4, NO-0275 Oslo, Norway. Photocure Group (Photocure) comprises Photocure ASA and the wholly owned subsidiary Photocure Inc. that is a US registered company.

Basis of preparation These condensed interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting. These interim financial statements should be read in conjunction with the consolidated financial statements for the year ended 31 December 2017 (the Annual Financial Statements) as they provide an update of previously reported information. The Group’s financial statements include from 2018 the principles and presentation related to the implementation of IFRS 15 and IFRS 9. Changes to significant accounting policies are described below and in Note 3. The interim report has not been subject to an audit. The Board of Directors approved the interim financial statements on 26 February 2019. Photocure has Norwegian kroner (NOK) as its functional currency and presentation currency. In the absence of any statement to the contrary, all financial information is reported in whole thousands. As a result of rounding adjustments, the figures in the financial statements may not add up to the totals.

Changes in significant accounting policies IFRS 15 Revenue from contract with customers establishes a comprehensive framework for determining whether, how much and when revenue is recognized. The standard replaces IAS 18 Revenue and related interpretations. IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018. The new standard contains a new set of principles on when and how to recognize and measure revenue as well as new requirements related to presentation. The core principle in that framework is that revenue should be recognized dependent on the transfer of promised goods or services to the customer for an amount that reflects the consideration which should be received in exchange for those goods or services. The objective of the standard is to provide a five-step approach to revenue recognition that includes identifying contracts with customers, identifying performance obligations, determining transaction prices, allocating transaction prices to performance obligations, and recognizing revenue when or as performance obligations are satisfied. The adoption of IFRS 15 have an impact on Photocure's timing of recognition of sale of goods as variable considerations related to sales-based royalties on partner sales are recognised when the in-market partner sales occur. The timing effect of recognition of sales of goods was calculated to be approximately NOK 6.4 million in reduction of equity as of January 1, 2018. Under IFRS 15 up-front fees not related to a separate performance obligation will be recognized over the term of the contract upon the delivery of goods. For current contracts the contract term is estimated to be equal to the expiry date of the patents in the relevant market areas. This will result in revenue being deferred compared to revenue recognition under the old standard. There is currently only one material open contract, entered into in 2011 where patents will expire in 2019, Deferred contract revenue as of January 1, 2018 was calculated to NOK 5.9 million while related contract costs have remaining amortization of NOK 1.7 million giving net adjustment of equity NOK 4.2 million.


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IFRS 9 IFRS 9 contains a new classification and measurement approach, impairment and hedge accounting rules for financial assets and liabilities. IFRS 9 is effective for annual periods beginning on or after 1 January 2018. Photocure has analyzed the impact of implementing IFRS 9 Financial Instruments from 1 January 2018. Based on the contracts, financial assets and liabilities currently held by the Group, the impact on Photocure’s financial statements are evaluated to be insignificant. The impact of changing from the incurred loss model under IAS 39 to the expected loss model under IFRS 9 on trade receivables amounts to NOK 0.2 million. IFRS 16 IFRS 16 introduces a single, on-balance sheet accounting model for lessees. The standard is effective for annual period beginning on or after 1 January 2019. The adoption of IFRS 16 is not expected to have a significant impact on Photocure's statement of financial position as future lease payments under existing lease contracts are limited. The preliminary calculation of future office lease contracts amounts to approximately NOK 10.0 million.

Important accounting valuations, estimates and assumptions Preparation of the accounts in accordance with IFRS requires the use of judgment, estimates and assumptions that have consequences for recognition in the balance sheet of assets and liabilities, the estimation of contingent liabilities and recorded revenues and expenses. The use of estimates and assumptions is based on the best discretionary judgement of the Group management.

Note 2 - Photocure Group – Segment information Photocure has two segments; Commercial Franchise and Development Portfolio. Commercial Franchise includes Hexvix/Cysview by sales channel, own sales and partner sales, and other sales, currently including milestone and royalties from a licence partner. Development Portfolio includes development of commercial products and pipeline products.

1 Jan - 31 December 2018(Amounts in NOK 1 000) Hex/Cys Hex/Cys Other Total Hex/Cys Total Grand

Own Sales Partner Sales Sales Develop. Pipeline R&D TotalSales revenues 110,725 62,209 303 173,237 - - - 173,237 Milestone revenues - 3,378 4,895 8,273 - - - 8,273 Cost of goods sold -6,562 -10,514 -71 -17,147 - - - -17,147 Gross profit 104,163 55,073 5,127 164,363 - - - 164,363 Gross profit of sales % 94 % 83 % 77 % 90 % 90 %R&D - - - - -2,363 -6,962 -9,325 -9,325 Sales & marketing -113,961 -6,258 - -120,219 - -994 -994 -121,213 Other & allocations -18,123 -17,630 - -35,753 -1,357 -7,206 -8,563 -44,317 Operating expenses -132,084 -23,888 - -155,972 -3,721 -15,162 -18,883 -174,855 EBITDA -27,921 31,185 5,127 8,391 -3,721 -15,162 -18,883 -10,492

Commercial Products Development Products


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1 Jan - 31 December 2017(Amounts in NOK 1 000) Hex/Cys Hex/Cys Other Total Hex/Cys Total Grand

Own Sales Partner Sales Sales Develop. Pipeline R&D TotalSales revenues 85,720 63,295 166 149,181 - - - 149,181 Milestone revenues - - 1,730 1,730 - - - 1,730 Cost of goods sold -3,403 -8,607 - -12,011 - - - -12,011 Gross profit 82,316 54,688 1,895 138,900 - - - 138,900 Gross profit of sales % 96 % 86 % 100 % 92 % 92 %R&D - - - - -3,905 -18,991 -22,896 -22,896 Sales & marketing -84,022 -8,320 - -92,342 - -4,012 -4,012 -96,355 Other & allocations -14,195 -21,208 -765 -36,168 -4,028 -12,548 -16,576 -52,744 Operating expenses -98,217 -29,527 -765 -128,510 -7,933 -35,551 -43,485 -171,995 EBITDA -15,901 25,160 1,130 10,390 -7,933 -35,551 -43,485 -33,095


Q4 2018(Amounts in NOK 1 000) Hex/Cys Hex/Cys Other Total Hex/Cys Total Grand

Own Sales Partner Sales Sales Develop. Pipeline R&D TotalSales revenues 31,959 14,385 182 46,526 - - - 46,526 Milestone revenues - 845 2,495 3,340 - - - 3,340 Cost of goods sold -2,023 -3,054 112 -4,964 - - - -4,964 Gross profit 29,937 12,176 2,789 44,902 - - - 44,902 Gross profit of sales % 94 % 79 % 161 % 89 % 89 %R&D - - - - -669 -1,343 -2,012 -2,012 Sales & marketing -32,213 -1,401 - -33,613 - -284 -284 -33,897 Other & allocations -5,047 -4,946 - -9,992 -497 -2,581 -3,078 -13,070 Operating expenses -37,259 -6,346 - -43,605 -1,166 -4,208 -5,374 -48,979 EBITDA -7,322 5,830 2,789 1,297 -1,166 -4,208 -5,374 -4,077


Q4 2017(Amounts in NOK 1 000) Hex/Cys Hex/Cys Other Total Hex/Cys Total Grand

Own Sales Partner Sales Sales Develop. Pipeline R&D TotalSales revenues 23,069 16,339 - 39,409 - - - 39,409 Milestone revenues - - - - - - - - Cost of goods sold -875 -2,529 - -3,404 - - - -3,404 Gross profit 22,195 13,810 - 36,005 - - - 36,005 Gross profit of sales % 96 % 85 % 91 % 91 %R&D - - - - -1,691 -3,890 -5,582 -5,582 Sales & marketing -20,030 -2,409 - -22,439 - -924 -924 -23,363 Other & allocations -5,058 -7,327 -236 -12,620 -1,355 -3,919 -5,274 -17,894 Operating expenses -25,088 -9,735 -236 -35,059 -3,046 -8,734 -11,780 -46,839 EBITDA -2,893 4,075 -236 946 -3,046 -8,734 -11,780 -10,834



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Note 3 – Changes in significant accounting policies The Group has initially adopted IFRS 15 'Revenue from Contracts with Customers' and IFRS 9 'Financial Instruments' from 1 January 2018. The effect of initially applying these standards is mainly attributed to the following: • The adoption of IFRS 15 will have an impact on Photocure's timing of recognition of sale of goods. The timing

effect of recognition of sales of goods is related to partner sales • Under IFRS 15 up-front fees not related to a separate performance obligation are recognized over the term of

the contract upon the delivery of goods. For current contracts the contract term is estimated to be equal to the expiry date of the patents in the relevant market areas. This result in revenue and contract costs are being deferred compared to revenue recognition under the previous standard

The Group has adopted IFRS 15 using the cumulative effect method and accordingly, the information presented for 2017 has not been restated. The following table summarizes the impact of transition to IFRS 15 and IFRS 9 on retained earnings at 1 January 2018 and 31 December 2018.

Statement of financial positionAs Adjust- Without As Adjust- Without

(Amounts in NOK 1 000) reported ments adjustm. reported ments adjustm.Intangible assets 33,315 33,315 22,502 22,502 Contract costs 1,744 -1,744 - 747 -747 - Other Non-currrent assets 54,171 54,171 54,518 54,518 Accounts receivable 14,371 202 14,573 20,371 288 20,660 Other Currrent assets 161,040 161,040 133,058 133,058 Total Assets 264,641 -1,542 263,099 231,196 -459 230,737 Shareholders' equity 207,334 10,746 218,080 176,342 6,605 182,947 Long-term liabilities 4,752 4,752 2,401 2,401 Contract liabilities 12,288 -12,288 - 7,064 -7,064 -0 Other Current liabilities 40,267 40,267 45,389 45,389 Total equity and liabilities 264,641 -1,542 263,099 231,196 -459 230,737

01.01.2018 31.12.2018

Statement of comprehensive incomeAs Adjust- Without

(all amounts in NOK 1 000) reported ments adjustm.Sales revenues 173,237 -1,846 171,391 Signing fees and milestone revenues 8,273 -3,378 4,896 Cost of goods sold -17,147 -17,147 Gross profit 164,363 -5,224 159,140

Total operating expenses -188,066 1,064 -187,002 EBIT -23,703 -4,160 -27,863

31.12.2018


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Note 4 – Income statement classified by nature

Note 5 – Tax

Temporary differences are recognized for the parent company only and the note disclosure for the Group is of this reason identic to the disclosure for parent company. The calculation of deferred tax asset 31 December 2018 is based on a tax rate of 22% and 31 December 2017 is based on a tax rate of 23%. The parent company has recognized a deferred tax asset regarding net temporary differences. Accumulated tax asset in the parent company at the end of December 2018 is NOK 52.4 million compared to NOK 52.9 million at end of 2017. There is no expiry on losses to be carried forward in Norway. The basis for recognition of a tax asset in Norway are the predicted future profit according to the business plan for all major markets and that temporary differences for the coming years will be reversed. The basis for the recognition of the tax asset is the assessment that there is convincing evidence that the deferred tax benefit will be utilized.

2018 2017(Amounts in NOK 1 000) 1.1-31.12 1.1-31.12Sales revenues 173,237 149,181 Signing fees and milestone revenues 8,273 1,730 Cost of goods sold -17,147 -12,011 Gross profit 164,363 138,900 Payroll expenses -99,369 -96,271 R&D costs excl. payroll expenses/other operating exp. -3,742 -12,999 Ordinary depreciation and amortisation -13,211 -12,108 Other operating expenses -71,744 -62,725 Total operating expenses -188,066 -184,103 EBIT -23,703 -45,203

(Amounts in NOK 1 000) 31.12.2018 31.12.2017Income tax expenseTax payable 533 -Changes in deferred tax -526 -6,883 Total income tax expense 6 -6,883

Tax base calculationProfit before income tax 1,654 -34,546 Permanent differences 801 -3,618 Temporary differences -8,063 26,568 Change in tax loss carried forward 5,609 11,596 Tax base 0 0

Temporary differences:Total -97,966 -100,528 Tax loss carried forward 336,041 330,542 Net temporary differences 238,075 230,014 Deferred tax benefit 238,075 230,014 Deferred tax asset 52,377 52,903


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For further information Photocure refer to the consolidated financial statements for the year ended 31 December 2017 note 10.

Note 6 – Earnings per share Earnings per share are calculated on the basis of the profit/loss for the year after tax but excluding other comprehensive items. The result is divided by a weighted average number of outstanding shares over the year, reduced by acquired treasury shares. The diluted earnings per share is calculated by adjusting the average number of outstanding shares by the number of employee options that can be exercised. Antidilution effects are not taken into consideration.

Note 7 – Restructuring Restructuring costs have been incurred with NOK 14.2 million for the year and relates to implemented headcount reductions and organizational changes. In total 6 employees including the CEO and CBO have left the Company or agreed to a severance agreement to leave before year end. The cost reductions do not relate to the commercial organization. Included in the restructuring costs are costs related to the exit of the CEO totaling NOK 7.0 million according to the employment agreement. As part of the exit agreements pension coverage in the Photocure balance has been reclassified to short term liabilities with NOK 3.2 million as of December 31, 2018.

2018 2017(Figures indicate the number of shares) 1.1-31.12 1.1-31.12

Issued ordinary shares 1 January 21,557,910 21,557,910

Effect of treasury shares -9,616 -809 Effect of shares issued 34,686 - Weighted average number of shares 21,582,980 21,557,101 Effect of outstanding share options 47,512 10,175 Weighted average number of diluted shares 21,630,492 21,567,276

Earnings per share in NOK -1.70 -1.61Earnings per share in NOK diluted -1.70 -1.61


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Note 8 – Fixed Assets

Photocure has from 2015 carried out a clinical study in US for the approved product Cysview in order to file a supplemental NDA. Related to this study Photocure has capitalized, net after amortization, NOK 19.6 million as of end December 2018 compared to NOK 29.0 million as of 31 December 2017. The investment is amortized on a straight-line basis in the profit and loss from the start of the project and over the remaining patent period for the approved product and indication. The remaining intangible assets consist of capitalized software and project for new homepage. From 01 January 2018 the implementation of IFRS 15 entails contract costs for milestones to be included.

Note 9 – Fair value The table below analyses financial assets recognized in the balance sheet at fair value according to the valuation method. The different levels have been defined as follows: Level 1: Noted prices in active markets for corresponding assets or liabilities Level 2: Available value measurements other than the noted prices classified as Level 1, either directly

observable in the form of agreed prices or indirectly as derived from the price of equivalent. Level 3: Value measurements of assets or liabilities that are not based on observed market values

Machinery &(Amounts in NOK 1 000) equipment IntangiblesNet book value 31.12.17 1,268 33,315 Adjustments initial applications of IFRS 15 1,744 Net book value 01.01.18 1,268 35,059 Net investments 31.12.18 1,480 794 Depreciation and amortization -607 -12,604 Net book value 31.12.18 2,141 23,249

Market value hierarchy(Amounts in NOK 1 000) Level 1 Level 2 Level 3 TotalFinancial assets available for sale: - Money market funds 79,114 - - 79,114 Total 79,114 - - 79,114


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Note 10 – Share capital Registered share capital in Photocure ASA amounts to:

The table below indicates the status of authorizations at 31 December 2018:

Shares owned, directly or indirectly, by members of the board, the President and CEO and senior management and their closely related associates as of 31 December 2018:

As part of the employee long-term incentive program for restricted shares in the company, 35,664 restricted shares were issued 7 May 2018 out of which senior management received 23,856 restricted shares. The restricted shares have a three year lock-up period and are subject to other customary terms and conditions for employee incentive programs.

No. of shares

Nominal value per

share

Share capital in

NOK

Share capital at 31 December 2017 21,557,910 NOK 0.50 10,778,955 Share capital at 31 December 2018 21,779,008 NOK 0.50 10,889,504

Treasury shares:Holdings of treasury shares at 31 December 2017 809 405 Buy-back of shares 13,000 NOK 0.50 6,500 Buy-back of restricted shares 1,121 NOK 0.50 561 Holdings of treasury shares at 31 December 2018 14,930 7,465

(Figures indicate the number of shares)

Purchase, treasury

shares

Ordinary share issue

Employee share

issues

Authorisation issued at the General Meeting on 9 May 2018 2,155,791 2,155,791 1,077,895 Share issues after the General Meeting on 9 May 2018 - - 185,434 Purchase of treasury shares -1,121 - - Remaining under authorisations at 31 December 2018 2,154,670 2,155,791 892,461

No. of No. ofNo. of restricted subscription

Name Position shares shares rightsDaniel Schneider President & CEO 15,000 - - Erik Dahl Chief Financial Officer 3,500 5,046 49,500 Ambaw Bellete Head, US Cancer Commercial Operations 3,600 5,551 22,500 Grete Hogstad Vice President Strategic Marketing 13,878 4,025 45,000 Espen Njåstein Head, Nordic Cancer Commercial Operations 8,378 2,691 51,100 Gry Stensrud Vice President Technical Development & Operations 1,845 3,803 53,300 Jan H. Egbert Chairperson of the board 14,500 - - Gwen Melincoff Board member 1,000 - - Tom Pike Board member 3,400 - -


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Note 11 – Share options At 31 December 2018, employees in Photocure had the following share option schemes:

The number of employee options and average exercise prices for Photocure, and development during the year:

Year of allocation 2017 2016 2015Option programme 2017 2016 2015Number 43,000 188,700 150,168Exercise price (NOK) 38.06 40.15 32.78Date of expiry (31 December) 2021 2020 2019

No. of shares

Average exercise price

(NOK) No. of shares

Average exercise price

(NOK)Outstanding at start of year 737,669 35.53 951,955 36.10 Allocated during the year - - 90,100 38.06 Become invalid during the year 170,367 38.02 94,627 37.35 Exercised during the year 185,434 30.18 2,667 27.39 Expired during the year - - 207,092 38.50 Outstanding at end of period 381,868 35.37 737,669 35.53 Exercisable options at end of period 367,533 36.98 591,389 34.56

31.12.2018 31.12.2017


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Note 12 – Shareholders Overview of the major shareholders at 1 January 2019:

Shareholder Account type Citizen No of shares %HIGH SEAS AS NOR 2,220,000 10.19 %FONDSFINANS NORGE NOR 975,000 4.48 %KLP AKSJENORGE NOR 930,062 4.27 %RADIUMHOSPITALETS FORSKNINGSSTIFTELSE NOR 693,319 3.18 %KOMMUNAL LANDSPENSJONSKASSE NOR 679,994 3.12 %MP PENSJON PK NOR 674,355 3.10 %MYRLID AS NOR 585,000 2.69 %NORDNET LIVSFORSIKRING AS NOR 409,871 1.88 %DANSKE BANK A/S NOM DNK 360,811 1.66 %BNP PARIBAS SECURITIES SERVICES NOM AUS 356,186 1.64 %VICAMA AS NOR 329,530 1.51 %POLAR CAPITAL GLOBAL HEALTHCARE GBR 254,537 1.17 %RUL AS NOR 244,451 1.12 %FONDSFINANS GLOBAL HELSE NOR 234,490 1.08 %EGELAND HOLDING AS NOR 230,000 1.06 %LEHRE HOLDING AS NOR 212,731 0.98 %BILLINGTON ERIK NOR 190,000 0.87 %NORDNET BANK AB NOM SWE 189,523 0.87 %A/S SKARV NOR 150,000 0.69 %PIBCO AS NOR 140,000 0.64 %Total 20 largest shareholders 10,059,860 46.19 %Total other shareholders 11,719,148 53.81 %Total number of shares 21,779,008 100.00 %


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Photocure Group – Alternative Performance Measures (Information provided based on Guidelines on Alternative Performance Measures (APMs) for listed issuers by The European Securities and Markets Authority - ESMA) Photocure reports certain performance measures that are not defined under IFRS, but which represent additional measures used by the Board and management in assessing performance as well as for reporting both internally and to shareholders. Photocure believes that the presentation of these non-IFRS performance measures provides useful information which provides readers with a more meaningful understanding of the underlying financial and operating performance of the Company when viewed in conjunction with the IFRS financial information. Photocure uses the following alternative performance measures.

EBITDA & EBIT Photocure regards EBITDA as the best approximation to pre-tax operating cash flow and reflects cash generation before working capital changes. EBITDA is widely used by investors when evaluating and comparing businesses and provides an analysis of the operating results excluding depreciation and amortisation. The non-cash elements depreciation and amortization may vary significantly between companies depending on the value and type of assets. The definition of EBITDA is “Earnings Before Interest, Tax, Depreciation and Amortization”. The reconciliation to the IFRS accounts is as follows:

Recurring EBITDA equals EBITDA before one-off items. One-off items are accounting items of a significant and extraordinary nature. In 2017 Photocure identified the write off of parts and finished goods inventory for Nedax as an on-off item, in total NOK 4.0 million. In 2018 Photocure incurred NOK 14.2 million in restructuring costs.

Revenue growth in constant currency Photocure’s business is conducted internationally and in respective local currency. Less than 10% of the revenue is conducted in Norwegian kroner, Photocure’s functional currency. Fluctuations in foreign exchange rates may have a significant impact on reported revenue in Norwegian kroner. To eliminate the translational effect of foreign exchange and to better understand the revenue development in the various regions Photocure provides calculated revenue growth information by region and total for the Company. The average exchange rates used to translate revenues as per the reporting dates were as follows:

2018 2017 2018 2017(all amounts in NOK 1 000) Q4 Q4 1.1-31.12 1.1-31.12

Gross profit 44,901 36,005 164,363 138,900Operating expenses excl amortization & depreciation -48,978 -46,838 -174,855 -168,016

EBITDA recurring -4,077 -10,833 -10,492 -29,116

Amortization & depreciation -3,431 -3,310 -13,211 -12,108

EBIT recurring -7,508 -14,143 -23,703 -41,224

2018 2017 2018 2017Q4 Q4 1.1-31.12 1.1-31.12

USD (NOK per 1 USD) 8.44 8.16 8.13 8.27 EUR (NOK per 1 EUR) 9.63 9.62 9.60 9.33 DKK (NOK per 100 DKK) 129.10 129.20 128.80 125.42 SEK (NOK per 100 SEK) 93.39 98.12 93.63 96.80


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Photocure Group – Other Measures

In-market sales A significant share of Photocure’s sales of Hexvix/Cysview, i.e. all sales classified as partner sales and all sales in the Nordic region, goes through partners and distributors. These partners and distributors carry inventory of Hexvix/Cysview. Photocure’s billing and revenue therefore does not necessarily reflect the demand from end users / hospitals at a given point in time as inventory levels may vary over time. Furthermore, Photocure’s revenue does not reflect the full value of the product in the market, as partners pay a royalty or a purchase price for the product below the price charged the end user. To capture end user demand the Company’s partners and distributors report their revenue to end users in terms of number of units invoiced and in terms of revenue achieved. Photocure collects this data and consolidate to get the group total in-market sales, in units and in Norwegian kroner.

2018 2017 2018 2017(all amounts in NOK 1 000) Q4 Q4 1.1-31.12 1.1-31.12

In-market sales 73,189 63,814 284,809 256,426


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Photocure Group – Proforma Accounts 2017 The Group has initially adopted IFRS 15 'Revenue from Contracts with Customers' and IFRS 9 'Financial Instruments' from 1 January 2018. See note 3 to the accounts for explanation and specification of impact of transition to IFRS 15 and IFRS 9 on retained earnings at 1 January 2018 and 30 September 2018. The following statements are prepared on the proforma basis as if the accounting principles IFRS 15 and IFRS 9 had been adopted 1 January 2017 and used in quarterly accounts for 2017. This is to enable comparison of the 2018 financial statements with 2017 financial statements.

MNOK Reported Adjustm ProForma Reported Adjustm ProForma

Hexvix / Cysview revenues 39.4 -3.1 36.3 149.0 -3.4 145.6 Other revenues 0.0 0.8 0.8 1.9 3.4 5.3 Total revenues 39.4 -2.3 37.1 150.9 -0.0 150.9 Gross profit 36.0 -2.3 33.7 138.9 -0.0 138.9 Operating expenses -46.8 0.0 -46.8 -168.0 -0.0 -168.0 EBITDA recurring -10.8 -2.3 -13.1 -29.1 -0.0 -29.1 Depreciation & amortization -3.3 -0.2 -3.6 -12.1 -1.0 -13.1 EBIT recurring -14.1 -2.5 -16.6 -41.2 -1.0 -42.2 One-Off items - - - -4.0 - -4.0 EBIT -14.1 -2.5 -16.6 -45.2 -1.0 -46.2 Net financial items 1.0 - 1.0 3.6 - 3.6 Tax expenses 0.2 - 0.2 6.9 - 6.9 Net profit/loss(-) -13.0 -2.5 -15.5 -34.7 -1.0 -35.7

Q4 '17 FY '17

MNOK Reported Adjustm ProForma Reported Adjustm ProForma Reported Adjustm ProForma Reported Adjustm ProForma

Hexvix / Cysview revenues 36.5 -0.1 36.4 74.1 0.7 74.8 109.6 -0.3 109.3 149.0 -3.4 145.6 Other revenues 0.0 0.8 0.8 1.7 1.7 3.4 1.9 2.5 4.4 1.9 3.4 5.3 Total revenues 36.5 0.7 37.2 75.9 2.3 78.2 111.5 2.3 113.8 150.9 -0.0 150.9 Gross profit 33.7 0.7 34.4 70.3 2.3 72.6 102.9 2.3 105.2 138.9 -0.0 138.9 Operating expenses -37.9 - -37.9 -78.9 -0.1 -79.1 -121.2 -0.0 -121.2 -168.0 -0.0 -168.0 EBITDA recurring -4.3 0.7 -3.5 -8.7 2.2 -6.4 -18.3 2.2 -16.1 -29.1 -0.0 -29.1 Depreciation & amortization -2.2 -0.2 -2.4 -4.5 -0.5 -5.0 -8.8 -0.7 -9.5 -12.1 -1.0 -13.1 EBIT recurring -6.4 0.5 -5.9 -13.2 1.7 -11.4 -27.1 1.5 -25.6 -41.2 -1.0 -42.2 One-Off items -4.0 - -4.0 -4.0 - -4.0 -4.0 - -4.0 -4.0 - -4.0 EBIT -10.4 0.5 -9.9 -17.1 1.7 -15.4 -31.1 1.5 -29.6 -45.2 -1.0 -46.2 Net financial items 1.1 - 1.1 2.3 - 2.3 2.7 - 2.7 3.6 - 3.6 Tax expenses 2.4 - 2.4 3.3 - 3.3 6.7 - 6.7 6.9 - 6.9 Net profit/loss(-) -6.9 0.5 -6.4 -11.6 1.7 -9.9 -21.7 1.5 -20.2 -34.7 -1.0 -35.7

YTD Q1 2017 YTD Q2 2017 FY 2017YTD Q3 2017


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For more information, please contact: Daniel Schneider, President and CEO Tel: +1 508 410 8044 Email: [email protected]

Photocure ASA Hoffsveien 4, NO - 0275 Oslo, Norway

Erik Dahl, CFO Tel: +47 450 55 000 Email: [email protected]

Telephone: +47 22 06 22 10 Fax: +47 22 06 22 18

Please visit our websites for information about our products: www.photocure.com www.hexvix.com www.cysview.com

http://www.photocure.com/

http://www.hexvix.com/

http://www.cysview.com/

Documents

FOURTH QUARTER REPORT 2018Global in-market unit sales increased 11% in the fourth quarter and 5% for the year reflecting a in- n market value of NOK 284 million (NOK 256 million) for